New Income Tax bill meant to be understood by citizens, not just lawyers: Finance Secretary

The new Income Tax Bill will not impose any new tax

The government’s upcoming new Income Tax Bill is being designed to make tax laws simpler and more easy to comprehend for ordinary citizens, not just legal professionals, Finance Secretary Tuhin Kanta Pandey said on February 6. Pandey stressed that the new bill will eliminate complex legal jargon and unnecessary provisions, making tax compliance a straightforward process for citizens.

He was speaking at a post-budget session on Union Budget 2025-26 organised by the PHD Chamber of Commerce and Industry (PHDCCI).

“The Income Tax Bill is not meant only for lawyers to understand; it is also meant for citizens. It will be simple, with no provisos or complicated language,” Pandey said, highlighting the significant departure from the current structure of tax laws. “The new Income Tax Bill will not impose any new tax but will fundamentally change how the law is drafted and understood,” he added.

According to a government source, the Cabinet is expected to discuss the new Income Tax Bill on February 7 before it is tabled in Parliament. The bill, which was announced by Union Finance Minister Nirmala Sitharaman in her Budget 2025 speech on February 1, represents a comprehensive rewrite of existing tax laws. Once introduced, it is likely to be referred to the Standing Committee for further deliberation and refinement.

Structural Overhaul

Clarifying that the bill will not alter tax rates or introduce new taxes, Pandey said the focus is on structural changes and rationalisation. “It will not change (tax rates) because that is the prerogative of the tax policy. But structurally, it undergoes a massive change - the way it reads, the way it connects, and the way it is understood. Redundancy will be removed and simplification will follow,” Pandey explained.

The new Income Tax Bill is part of a broader reform agenda aimed at simplifying tax compliance, improving transparency, and enhancing citizen engagement. The bill will focus on reducing legal ambiguity thus promoting greater ease of doing business and better compliance.

Unlike the current Income Tax Act, which is often criticised for being overly complex and loaded with legal terminologies, the new law will adopt a citizen-centric approach.

The new Income Tax Bill is likely to set a new benchmark for how legislation is drafted and communicated in the future.